Hasil untuk "Capital. Capital investments"

L. Summers

Marianne Baxter, Mario J. Crucini

J. Anthony, K. Ramesh

Andrew B. Abel, N. Mankiw, Lawrence H. Summers et al.

G. Garrett

D. Coe, E. Helpman, E. Helpman

I. Ehrlich, Francis T. Lui

Jian Chen, B. Fleisher

Mohsen Namaei Ghasemi, Mehdi Fathabadi, Masood Soufi Majidpoor et al.

AbstractThe total GDP of the MENA region is approximately $7 trillion (5.9% of the world economy), and its population is around 405 million (5.5% of the global population). This article aimed to evaluate the drivers of sustainability in 15 MENA countries from 1998 to 2019, examining different sub-periods. Evidence indicated that 14 countries made strides in catch-up growth between 1999 and 2019. The correlations were also calculated in four periods: 1980–1989, 1990–1999, 2000–2009, and 2010–2019. In the first period, only Egypt and Morocco showed progress in catching up. During the second period, nine countries experienced catch-up, while six lagged behind. The third period saw substantial improvements in the catch-up across most countries, with the exception of the UAE. In the fourth period, most countries continued on a catch-up trajectory. The analysis revealed that capital deepening played a crucial role in the performance of 11 countries. The human resource participation was positive in most countries but was negative in Iraq, Syria, and Saudi Arabia—although overall, its contribution was less significant than capital deepening. None of the countries demonstrated a positive contribution of productivity, and there was no evidence of productivity growth supporting performance improvements, leaving a considerable gap compared to the United States (as an ideal example). Furthermore, the catch-up patterns of large economies mirrored those of smaller economies.IntroductionAmong the various explanations for the surge in per capita income growth during the quarter-century following World War II, the most prominent hypothesis is that industrialized Western countries were able to produce a large amount of unused technology. Most of these technologies included methods of production and systems of industrial and commercial organization that were already established in the United States but had yet to be widely adopted in other Western countries. According to the hypothesis, the United States is viewed as a leader, while other nations are followers with the opportunity to catch up. Following this perspective, the loss of catch-up opportunities is often cited as a reason for lagging behind concerning the per capita income in the follower countries. The concept of catch-up and follow-up suggests a broader hypothesis stating that per capita income levels among countries tend to converge. However, catch-up and convergence are distinct concepts. To address the issue, the present study tried to answer the following questions: How has the gap in per capita income among MENA countries evolved over recent decades? And is the catch-up phenomenon evident in these nations? At first glance, distinguishing between these questions may seem challenging, as both involve a progress toward more equitable living standards among countries—often referred to as convergence. This article, therefore, sought to assess the convergence and catch-up in MENA countries, shedding light on the factors driving the catch-up.Materials and MethodsThe first section of the methodology was to clarify the distinction between convergence and catch-up. It specifically examined how differences in growth rates across countries influenced both the average GDP per capita relative to the United States and the Mean Log Deviation (MLD) over time. The MLD reveals how variations in average growth relative to the United States, along with the distribution of growth rates among countries, impact these two metrics.To evaluate the catch-up performance over a given period, we defined the Catch-Up Index (CUI) as follows:(1) Where  represents for the relative per capita income of country  in year  compared to the United States, which is defined as follows: (2) Note that  and  denote the per capita income of country  and the United States in year , respectively, measured based on purchasing power parity (PPP) at constant prices. According to this definition, if the index is positive ( ), country  has experienced catch-up; If the ( ) index is negative ( ), country  has lagged behind. Moreover, if the index is zero ( ), country  has neither caught up nor lagged behind. To analyze the factors driving the catch-up, the study employed the analytical framework of GDP growth developed by Jorgenson et al. (2005), as presented below:  3) Thus, the CUI of a country can be divided into three components, representing its performance relative to the United States across three sources of per capita growth:: The difference in the capital deepening rate.: The difference in the labor force participation rate.: The difference in total factor productivity (TFP).Results and DiscussionIn Figure 1, the left axis displays convergence, shown by the MLD of GDP per capita (blue line). The right axis displays catch-up, measured by the average GDP per capita of 15 Middle Eastern countries relative to that of the United States (red line). Note that GDP per capita is measured at constant 2017 prices based on purchasing power parity. The graph clearly demonstrates that convergence and catch-up are distinct concepts. A comparison between 1980 and 2019 revealed significant convergence, as the dispersion of per capita income across these countries in 2019 (MLD = 0.40) was significantly lower than in 1980 (MLD = 1.07). However, no catch-up was observed during this period, as the average per capita income of these countries relative to the United States declined from 1.12 in 1980 to 0.47 in 2019.Figure 1. Convergence and Catch-Up in MENA Countries  Source: Research resultsRefer to Table 1 for further clarity. Concerning the entire 40-year period as a whole, the results indicated both convergence and a relative lagging behind.Table 1. Convergence and Catch-Up1980-20192010-20192000-20091980-1999 ConvergenceSlight convergenceConvergenceConvergenceDispersion among countriesLagging behindLagging behindCatch-upLagging behindGaps with the USASource: Research resultsEvidence suggests that capital deepening played a significant role in the performance of the 11 countries that experienced catch-up. In contrast, the impact of human resources appears to be less pronounced compared to that of capital deepening.  Table 2. Drivers of Economic Catch-Up (1980–2019)Catch-up components (Share)Catch-up components (amount) Total factor productivityHuman resource participationCapital deepeningTotal factor productivityHuman resource participationCapital deepeningCatch-up Index (CUI)Country-166.012.7253.3-6.140.479.363.69Egypt-122.346.5175.8-2.961.134.252.42Lebanon-108.028.4179.6-1.60.42.61.4Iran22.7-2.679.90.26-0.030.91.13Iraq-784.4290.1594.3-7.962.956.031.02Oman-833.059.7873.3-69.10.497.240.83Morocco-702.7196606.7-4.41.23.80.6Jordan-706.9-94.0900.9-3.1-0.413.950.44Syria-204.75201.41946.1-6.40.616.10.31Tunisia-2583.01072.02610.8-4.571.373.330.13Bahrain-10541.33290.67350.7-4.691.463.270.04Qatar5412.4-3782.5-1529-9-2.631.840.74-0.05Kuwait199.136.1-135.2-1.16-0.210.79-0.58Saudi Arabia178.9-80.31.4-3.491.57-0.03-1.95Algeria18.1-5.687.5-0.860.26-4.14-4.74The EmiratesSource: Research resultsConclusionThe findings showed that MENA economies are heavily reliant on capital accumulation and deepening, with capital deepening serving as the primary driver of economic growth. This trend has continued for over 40 years and is likely to persist. There is no evidence to suggest that productivity growth has significantly contributed to the performance of MENA countries, leaving them substantially behind the United States in this respect. Additionally, the catch-up patterns seen in larger economies closely resemble those of smaller economies. To enhance economic stability and improve future prospects, it is essential for these countries to prioritize investment, increase the involvement of skilled labor (especially in knowledge-based industries), and gradually make a transition toward a knowledge-based economy. Producing more complex goods and fostering regional collaboration to reduce political tensions and economic risks are also crucial steps. By adopting these strategies, MENA countries can bolster their catch-up and pave the way for sustainable economic development in the future.

Nicholas Schwenke, Avani Sebastian, Warren Maroun

Background: The value and performance of underlying investments are the primary driver of value created by investment holding companies. In theory, the intrinsic net asset value of these companies should reflect the fair value of their ownership stakes in the underlying investments; however, most investment holding companies trade at a discount to the reported measure of intrinsic value per share. Aim: The aim of this study is to determine if corporate actions have reduced discounts to intrinsic net asset value among a sample of Johannesburg Securities Exchange (JSE)-listed holding companies. Setting: The study focused on a sample of JSE-listed investment holding companies. Method: The study was quantitative in nature, and an event study using multiple estimation models was used to determine the share price reaction to the corporate actions. Results: The results confirm the widening of a discount and indicate that corporate actions demonstrate no significant effect in reducing the discount to net asset value. Conclusion: The corporate actions in this study were not effective as a method to address discounts for holding companies. The persistent and widening discount reflects market perceptions. Demonstration of management’s ability to allocate capital and provide returns above the cost of capital is suggested as the only way to narrow the discount. Contribution: This study contributes to the existing JSE event study literature by focusing on investment holding companies and highlighting that the market perception of investment holding companies is reflected in the widening discount to intrinsic net asset value.

Cristescu Amalia, Stănilă Larisa, Vasilescu Maria Denisa et al.

Labour costs are a fundamental component of production expenses, significantly impacting both the quantity and quality of output. This study explores the determinants of labour costs within EU member states that have implemented minimum wage policies over the past two decades. The research technique includes a comprehensive panel analysis of EU member states to identify significant variables influencing labour costs, as well as cluster analysis to discover underlying patterns across the nations under examination. Our findings reveal that higher minimum wage levels, higher employment rates, increased labour productivity, and greater trade openness are positively correlated with higher labour costs. Specifically, increases in these variables lead to higher wages and a broader tax base, while greater trade openness results in elevated labour costs due to expanded market opportunities. Conversely, gross fixed capital formation negatively affects labour costs, as investments in production assets tend to reduce labour requirements or hours worked. The cluster analysis led to the identification of three distinct groups. The first cluster consists of well-developed economies with modest labour cost increases and average minimum wages. The second cluster includes countries with substantial labour cost increases, low minimum wages, and significant productivity gains. The third cluster features nations with high minimum wages and high employment rates. This paper contributes to the field by highlighting the complex interplay between labour costs and economic factors, offering insights for decision-makers to tailor macroeconomic and company-level strategies to specific local conditions. The findings emphasise the importance of balancing wage policies with sustainable economic development to enhance competitiveness while ensuring fair labour conditions.

Souleyman Beghni, Meriyam Gourari

This study investigates the impact of innovation inputs and outputs on the growth of Algeria's manufacturing sector from Q1 2011 to Q4 2022, employing an ARDL model to analyze 44 quarterly observations. The results indicate that innovation inputs, such as institutions, human capital and research, infrastructure, market sophistication, and business sophistication, have a statistically significant negative impact on manufacturing growth, suggesting inefficiencies or delays in realizing the benefits of innovation investments. Conversely, innovation outputs, including knowledge and technology outputs and creative outputs, exhibit a weaker and statistically insignificant negative correlation with manufacturing growth. The error correction term is highly significant, indicating a rapid adjustment towards long-run equilibrium, with 47.2% of deviations corrected each quarter. The model's strong fit, reflected by an R-squared value of 0.693658, underscores its explanatory power. However, the ARDL model oversimplifies the complex economic interactions in Algeria, potentially overlooking numerous mediating factors and the influence of regional stability and security issues on manufacturing performance. Furthermore, the context-specific findings may not be applicable to countries with different economic structures. Enhancing the efficiency of innovation investments could lead to significant growth in Algeria's manufacturing industries, with potential social impacts including broader economic development, increased employment, and social stability. This study offers valuable insights into the relationship between innovation and manufacturing growth in Algeria, highlighting the importance of efficient innovation strategies for economic development. Key words: Innovation, Knowledge, Manufacturing, ARDL Model, Algeria.

C. Morrison, A. Schwartz

E. Mendoza, G. Milesi-Ferretti, Patrick K. Asea

S. Poncet, Walter Steingress, H. Vandenbussche

Robert W. Vishny, A. Shleifer

We propose a theory of financial intermediaries operating in markets influenced by investor sentiment. In our model, banks make loans, securitize these loans, trade in them, or hold cash. They can also borrow money, using their security holdings as collateral. We embed such banks in a stylized financial market, in which securitized loans may be mispriced, and investigate how banks allocate limited capital among the various activities, as well as how they choose their capital structure. Banks maximize profits, and there are no conflicts of interest between bank shareholders and creditors. The theory explains the cyclical behavior of credit and investment, but also accounts for the fundamental instability of banks operating in financial markets, especially when banks use leverage.

Russell Cooper, J. Haltiwanger, Laura Power

Diana Bowser, Eckhard Kleinau, Grace Berchtold et al.

<h4>Background</h4>Since 2003, the government of Ethiopia has trained and deployed more than 42,000 Health Extension Workers across the country to provide primary healthcare services. However, no research has assessed the return on investments into human resources for health in this setting. This study aims to fill this gap by analyzing the return on investment within the context of the Ethiopian Health Extension Program.<h4>Methods</h4>We collected data on associated costs and benefits attributed to the Health Extension Program from primary and secondary sources. Primary sources included patient exit interviews, surveys with Health Extension Workers and other health professionals, key informant interviews, and focus groups conducted in the following regions: Amhara, Oromia, Tigray, and the Southern Nations Nationalities and Peoples' Region. Secondary sources consisted of financial and administrative reports gathered from the Ministry of Health and its subsidiaries, as well as data accessed through the Lives Saved Tool. A long-run return on investment analysis was conducted considering program costs (personnel, recurrent, and capital investments) in comparison to benefits gained through improved productivity, equity, empowerment, and employment.<h4>Findings</h4>Between 2008-2017, Health Extension Workers saved 50,700 maternal and child lives. Much of the benefits were accrued by low income, less educated, and rural women who had limited access to services at higher level health centers and hospitals. Regional return ranged from $1.27 to $6.64, with an overall return on investment in the range of $1.59 to $3.71.<h4>Conclusion</h4>While evidence of return on investments are limited, results from the Health Extension Program in Ethiopia show promise for similar large, sustainable system redesigns. However, this evidence needs to be contextualized and adapted in different settings to inform policy and practice. The Ethiopian Health Extension Program can serve as a model for other nations of a large-scale human resources for health program containing strong economic benefits and long-term sustainability through successful government integration.

Gordon Hanson

This paper examines whether policies to promote foreign direct investment (FDI) make economic sense. The discussion focuses on whether existing academic research suggests that the benefits of FDI are sufficient to justify the kind of policy interventions seen in practice. For small open economies, efficient taxation of foreign and domestic capital depends on their relative mobility. If foreign and domestic capital are equally mobile internationally, it will be optimal for countries to subject both types of capital to equal tax treatment. If foreign capital is more mobile internationally, it will be optimal to have lower taxes on capital owned by foreign residents than on capital owned by domestic residents. Absent market failure, there is no justification for favouring FDI over foreign portfolio investment. In practice, countries appear to tax income from foreign capital at rates lower than those for domestic capital and to subject different forms of foreign investment to very different tax treatment. FDI appears to be sensitive to host-country characteristics. Higher taxes deter foreign investment, while a more educated work force and larger goods markets attract FDI. There is also some evidence that multinationals tend to agglomerate in a manner consistent with location-specific externalities. There is weak evidence that FDI generates positive spillovers for host economies. While multinationals are attracted to high-productivity countries, and to high-productivity industries within these countries, there is little evidence at the firm or plant level that FDI raises the productivity of domestic enterprises. Indeed, it appears that plants in industries with a larger multinational presence tend to enjoy lower rates of productivity growth over time. Empirical research thus provides little support for the idea that promoting FDI is warranted on welfare grounds. Subsidies to FDI are more likely to be warranted where multinationals are intensive in the use of elastically supplied factors, where the arrival of multinationals to a market does not lower the market share of domestic firms, and where FDI generates strong positive productivity spillovers for domestic agents. Empirical research suggests that the first and third conditions are unlikely to hold. In the three cases we examine, it appears that the second condition holds, but not the first or third conditions. This suggests that Brazil’s subsidies to foreign automobile manufacturers may have lowered national welfare. Costa Rica appears to have been prudent in not offering subsidies in the case of Intel. There clearly is a need for much more research on the host-economy consequences of FDI. The impression from existing academic literature is that countries should be sceptical about claims that promoting FDI will raise national welfare. A sensible approach for policy makes in host countries is to presume that subsidizing FDI is unwarranted, unless clear evidence is presented to support the argument that the social returns to FDI exceed the private returns.

Alan Barrett, Philip J. O'Connell

Using data from surveys of enterprises in Ireland in 1993 and 1996–97, the authors estimate the productivity effects of general training, specific training, and all types of training combined. Statistically significant positive effects on productivity are found both for all training and for general training, but not for specific training. The positive effect of general training remains when the researchers control for factors such as changes in work organization, corporate re-structuring, firm size, and the initial level of human capital in the enterprise. The impact of general training varies positively with the level of capital investment.